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Foreign economic activity of Russia

Foreign economic activity of Russia

The global economic environment is undergoing global changes, and in order to maintain its leading position in it, Russia has to solve difficult problems. Modern challenges require fundamentally new solutions from Russia that will allow it to occupy a worthy place in the international division of labor.

The share of the Russian Federation in world trade is still critically small, despite the fact that three years ago the government identified new vectors for the development of foreign economic activity and tools for their implementation. Today, the products of domestic engineering enterprises are almost not represented in the world export system, while the Russian market is confidently occupied by foreign companies. At the same time, Russian production is largely dependent on imports, and at the same time forced to work in the most severe conditions of sanctions.

Russia's share in world GDP (PPP), interest

Russia's share in world GDP (PPP) (%), source IMF

It is “just nothing” to get out of the current situation - to increase the share of high-tech industries in the country's GDP and its export structure. This segment worldwide demonstrates the fastest growth rates, which means that bringing the Russian economy to a new level is impossible without the development of high-tech innovative industries and their products entering the international market.

The world economy is challenging Russia, but in spite of fears, it should not be a brake, but an impetus to the breakthrough movement in selected areas. The priority today is to stimulate the development of industries that produce competitive high-tech products, and to create an integrated system of its support in foreign markets. The development of new import-substituting products that would meet international standards and the development of the system of import substitution as a whole are also needed.

Exports / imports of goods and services in Russia, billions of dollars

Exports / imports of goods and services in Russia, in billions of dollars, photo WEB

Today, the volume of industrial exports in Russia is significantly inferior to the volume of raw materials, and this inadequate ratio requires immediate adjustment. Non-oil exports should be at least doubled, and for this, Russia needs to develop economic, political and trade relations within the framework of the EAEU and form competitive advantages in the system of global division of labor.

Another promising direction in the development of the Russian economy is the promotion of domestic agricultural products to foreign markets. In the agrarian sector of Russia there is the undoubted handicap that needs to be used, water and labor resources of the country allow the production of environmentally friendly products, and the demand for them in the world is growing rapidly.

The main exported goods of Russia in 2018

The main exported goods of Russia in 2018, (%), source

In order to objectively evaluate the effectiveness of the taken measures, it is necessary to create a system for monitoring key indicators: the ratio of non-oil and raw materials exports, the share of Russian producers in the world market, the number of import-substituting industries, and so on. Analysis of these data will allow you to track the dynamics of processes and identify their weak links.

However, in any case, the implementation of the chosen strategy for entering foreign markets and developing a competitive business is impossible without state support. State insurance of foreign economic risks is necessary to stimulate exporters, debugging of the tax levies and customs deductions mechanism and much more. Support is also needed by export-oriented producers themselves. Export-oriented producers also need support. Revision of tax conditions for their investors, the abolition of customs duties on the import of necessary imported equipment, the creation of preferential tax conditions and other measures will allow in a short time to increase the volume of domestic production that can compete with imported ones.

Russian export structure

Russian export structure, source

Separate mechanisms could stimulate the production and export of agricultural products. Among them: the introduction of incentives for the imported equipment, which is necessary for the modernization of the domestic agricultural sector, the provision of export credits to domestic machine builders, as well as an increase in the share of Russian agricultural producers in foreign markets, and the displacement of imported food products by domestic counterparts.

Such comprehensive measures will be the impetus for the formation of effective import substitution, for the output of competitive domestic products to the international market, and as a result, the development of the Russian economy as a whole.

Victoria Romanova, Russia, Moscow


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